I recently spoke with an owner of a 28-person creative agency in NY. She was complaining, saying she felt like she was working for her staff, instead of the other way around. Not only was she carrying all the financial risk and stress of running the agency, but she was also doing more of the day-to-day work as her team clamored for more time off, more flexible hours, more pay, more professional development, more benefits, etc. She believed her staff was ungrateful and completely oblivious to how many sacrifices she was making just to keep them gainfully employed.

As we talked further, she realized few of her clients or projects were ideal. Rather, she had lowered her standards and was accepting less desirable work to keep her team fully utilized. She asked,

“When did my job shift from building an agency that provides the type of solutions I’m best at, to becoming a place that accepts basically anything from anyone just to keep the lights on?”

This agency principle is suffering from talent mismanagement, and she’s not alone. Most agency owners I know initially grew their firm to work on fun projects for desirable clients; but, over time, most of the desirable accounts left and most of the staff stayed.

Unfortunately, the staff that leaves tend to be “A” players, professionals who are capable and talented enough to start their own agency, or are attractive enough to be poached by bigger/better agencies that offer them more money or better opportunities.

That leaves mediocre talent who stick around. Over time, they start to expect more money and agency owners cave because they mistakenly believe they can’t afford to lose the “B” players the same way they lost their “A” players. Soon, they start accepting “B” and “C”-type work, because that’s what their firm is now capable of doing, and the agency principle has to step in and do more of the heavy lifting in order to compensate for average talent.

Eventually, agency owners spend more time working in their business instead of on their business. They earn less money than they should, work longer hours on less inspiring projects for difficult clients, and drive home at night daydreaming about the day they can retire. Yet, even in their dreams, they are naïve, grossly over-estimating their firm’s valuation and setting themselves up for disappointment when they try to exit but find very few buyers.

Agency ownership doesn’t have to be like this.

I know some agency owners who never dream of retiring because they are already doing their dream job. They are making more money year over year while managing fewer staff. They only accept projects they are uniquely qualified to solve and personally motivated to work on. They have perfected their positioning, rarely- if ever- respond to RFP’s, and enjoy mutually beneficial relationships with some of the best and brightest minds in their industry.

The sole difference between these two types of agency principles is talent management, or more to the point, talent mismanagement.

Our knowledge-based economy relies on professional service providers who have access to specialized skills. Historically, clients sourced these skills from large consultancies or agencies, and those firms would occasionally outsource to freelancers or boutique firms to help augment their in-house capabilities. But the means by which clients, consultancies, and agencies now procure specialized talent has changed. Drastically.

First, the talent themselves are perfecting free agency. They have recognized their value and are becoming more sophisticated. Fast Company writes how they are getting better at “self-management, self-promotion, relentless marketing, administration, and self-development”. They are banding together to form co-ops of sorts or creating micro-alliances for the mutual gain of their members. This talent has shunned traditional employee/employer engagements and instead opt for the flexibility and financial rewards that come from being their own boss. That means agency owners need to stop trying to hire so many full-time personnel, and instead start thinking about new ways to attract top talent to work with their firm ad hoc.

Also, the sheer number of non-traditional workers is growing exponentially. Digiday reports that ad agencies are experiencing 30% attrition, and many economists predict solo-prenuers will make up 40% of the workforce over the next few years. It’s impossible for any agency owner to properly assess all the talent available to them, and they do their client’s a gross disservice by continually going to the same bench and utilizing the same players despite better available alternatives. Agency owners should instead access communities of craftsperson’s who specialize in certain industries, possess niche skills, or reside within preferred geographies, in order to give their clients the ultimate custom solution.

Perhaps most interesting, agency owners that properly leverage these emerging communities of subject matter experts (either solo-prenuers or small agencies) are finding the relationships reciprocal. If firms only outsource to people who take work, those firms are missing out on utilizing the talent that can give work as well. The best contingent workers are serving their own clients on projects that frequently exceed their scope and expertise. They often reach out to bigger agencies to assist with those projects, or at least provide warm biz dev leads, thus providing givers of work the chance to become takers, and vice-versa.

It’s a compelling proposition for agency owners to consider. Reduce headcount, thus better aligning variable expenses with the volatility of the marketing services industry, PLUS access superior talent in a manner that doesn’t burden the bottom line, PLUS gain new business prospects from a pool of preferred providers.

These “give & get” work relationships don’t exist from online marketplaces like Upwork, Catalant, or Fivver. Those sites are single-mindedly devoted to helping end users (mostly clients) find the lowest cost provider by bypassing agency middlemen.

Agency owners should utilize sites like www.Commun-o.com, which is a closed community, not accessible to clients, not funded by commissions or project-based fees, and populated with curated marketing service providers who share a “better together” philosophy. Communo serves as an aggregator of talent and jobs, a function that Fast Company calls a “Professional Triber”. According to them, “As more companies rely on on-demand workers, the role of a professional triber–a freelance professional manager that specializes in putting teams together for very specific projects–will be in demand.”

For most agency owners, that demand is now. Fortunately, Communo is here.

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